Investing November 19, 2010

Master Trusts See Positive Q3 2010

November 19, 2010 (PLANSPONSOR.com) - The median return of the BNY Mellon Master Trust Universe was 8.48% for the third quarter of 2010, reversing course from the -4.87 % return reported for Q2.
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With the rebound, the median return is 6.70% on a year-to-date basis and 10.32% for the twelve months ending September 30, 2010.  

According to a press release, 100% of plans posted positive results for the quarter ending September 30, 2010.  All but a single plan (99.85%) also saw positive returns on a year-to-date basis. Less than 25% of plans matched or outperformed the custom policy return of 9.56% for the third quarter, a significant drop compared to Q2. Year-to-date, a more typical 84% of plans met or exceeded the policy return of 5.29%.

Corporate plans were the leading performer for the third quarter, posting a median return of 8.95%, closely followed by public funds, Taft Hartley, health care, and foundations and endowments.

Non-U.S. equities were the dominant asset class for the quarter with the median return up 16.29% compared to the MSCI World ex USA return of 16.21%, the press release said. U.S. equities posted 11.58% for the quarter with the Russell 3000 Index up 11.53%.  The median return for non-U.S. fixed income was 8.59% compared to the Citigroup Non-U.S. World Government Bond Index return of 10.45%.  U.S. fixed income was the lowest performing asset class for the quarter with a median return of 3.51%, versus the Barclays Capital U.S. Aggregate Bond Index return of 2.48%.    

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The average asset allocation in the BNY Mellon U.S. Master Trust Universe for the third quarter was: U.S. equity 32%, U.S. fixed income 28%, non-U.S. equity 17%, non-U.S. fixed income 2%, alternative investments 10%, real estate 2%, cash 1%, and other (oil, gas, etc.) 8%.  

With a market value of $1.19 trillion and an average plan size of $1.64 billion, the BNY Mellon U.S. Master Trust Universe consists of 728 corporate, foundation, endowment, public, Taft-Hartley and health care plans.
Products November 19, 2010

Consultant Designs ‘New’ 401(k)

November 19, 2010 (PLANSPONSOR.com) – Nyhart, an Indianapolis-based independent actuarial and employee benefits consulting firm, announced what it calls standards for the Next Generation 401(k).
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A news release said the new retirement benefit transforms how current, outdated 401(k) benefits are structured and “addresses the many flaws and problems exposed during the recent economic downturn.”

The company said its senior actuaries and retirement benefit advisers spent six months researching and analyzing issues with current 401(k) plans. “The research revealed how the traditional approach to 401(k) fails to provide options that affect retirement: employee contribution rates and the funds being offered,” the news release said.

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Highlights include, according to the announcement:

  • Employees receive education to understand how their contribution impacts their retirement age,
  • Exclusive use of low-cost funds provides maximum retirement balance impact and avoids unnecessary fees and costs,
  • Custom target-date portfolios shift funds into investment channels that minimize risk based on age, not just investment-type, limiting recessionary dips,
  • Integrated single-source administration and education services lower overall costs for employers,
  • “Extensive” fiduciary protection mitigates risk for the employer and their investment committee.

More information is at www.nyhart.com or by calling (317) 845-3500.

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